Capital Flows and Their Macroeconomic Effects in India

Author/Editor:

Renu Kohli

Publication Date:

December 1, 2001

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper documents trends in movement and composition of capital flows into India in a comparative perspective, examines the impact of these flows upon key macroeconomic variables in the economy, and dwells on implications for economic policy. We find that an inflow of foreign capital results in a real appreciation and has a significant impact on domestic money supply. During a capital surge, these effects have been countered through intervention and sterilization. The paper concludes with a discussion on the costs of these policies in the event of a heavy inflow of foreign capital into India.

Series:

Working Paper No. 01/192

Subject:

English

Publication Date:

December 1, 2001

ISBN/ISSN:

9781451859768/1018-5941

Stock No:

WPIEA1922001

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

36

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